Not all gift cards are treated equally for tax purposes. IRD distinguishes between open-loop and closed-loop cards
Open-loop gift cards → PAYE applies
These are cards such as Visa, Mastercard or Prezzy cards that can be used almost anywhere. Because they operate just like cash, IRD treats them as monetary remuneration and requires PAYE to be paid on them.
Closed-loop gift cards → Usually treated as non-cash benefits (FBT rules)
These are store- or mall-specific gift cards such as Farmers, petrol stations, supermarkets, or Westfield-type cards. They cannot be redeemed for cash and are normally treated as non-cash fringe benefits.
Please let us know if you have any questions regarding this.
It’s not surprising many businesses drop their prices to compete with a rival – especially one who’s started discounting to get more sales.
If you’re tempted, consider where you want to sit in the market, not just how your prices compare. A bit of thought could save your business from making a costly mistake.
Panicking and slashing prices to keep up with competitors can backfire. You can not only hurt your profit margins, but also damage your brand. Would Rolls Royce ever cut prices just to sell a few more cars?
It’s OK if you’re aiming to be a cheap, high-volume supplier in the market. Your prices will reflect that. But if you position your business as a premium, high-value brand, cutting prices might not help.
Be clear on where your firm sits. Then look at what your competitors are doing. If they’re cutting prices they might be trying to reposition themselves as a cut-price business. Understanding their moves helps you plan yours.
Important in any strategy is to figure out how much profit you need, not just to stay afloat, but to grow. Businesses need to make money, so your pricing has to support that.
Sometimes, raising your prices might actually be smarter, especially if you’re adding value. An example is when McDonald’s opened a store close to a shop selling hamburgers. The other owner doubled his prices and lost about 10% of his customers. But by doubling his price, he convinced people his product was so much better.
So don’t treat pricing as a reaction, but as a statement. Remember, pricing on any part of the scale determines how you are perceived.
If you know a young person looking for their first role, here are some down- to-earth tips that might help:
In your supporting info, include (in this order):
Last but not least, have someone else proofread your CV. Spelling or grammar mistakes can sink your chances, so a second pair of eyes is always a good idea.
AI is useful for answering business-related questions, but it can be more powerful if you use it the right way.
If you’re new to AI, there are multiple applications readily available – ChatGPT, Google Gemini, Microsoft Copilot and Meta AI among them.
Ask and you will get an answer, but if you’re specific with your questions, the answer will be more specific. For example, don’t just ask: “How do I market my business?” It’s better to ask: “What are some low-cost digital marketing strategies for a local service business with less than $1000/month to spend?”
Don’t ask: “How do I do X?” Try: “Give me a step-by- step plan for launching a subscription-based online news service.”
When you have an answer (almost instantly), follow up with more questions. Treat AI like a business consultant – it can keep going to clarify points, and refine answers through conversation.
But always remember, AI is not perfect. Use it to help you prepare and speed up your thinking, but verify important or high-stakes decisions with your accountant or lawyer.
Often, when a property is bought for rental, the owner will do it up shortly after purchase after it is tenanted.
IRD’s view is this cost should generally be added to the amount paid for the property.
Why? Because if it is work which the previous owner might have done, it is assumed, if that had happened, you would have paid more for the property.
It is better to plan your maintenance and delay to a point where some wear and tear has occurred while you own it. Don’t rush in at the beginning.
The following are the factors which should be taken into account when determining whether a maintenance cost should be added to the cost of the property or treated as repairs:
Some prices just seem like a better deal, so you end up buying even when you weren’t planning to.
How you were influenced is probably not by accident, and you probably fall for the pricing psychology behind it more often than you think.
Two clever strategies behind this psychology are what are known as the decoy effect and zero pricing.
Many businesses use the decoy effect to steer your choices. The idea is simple: offer three options, but promote one as a no-brainer. For example, the price at a café shows a small coffee for $6, a medium at $7.20 and a large for $7.50. What coffee are you steered towards?
The medium coffee is not really there to sell. It’s a decoy. Its job is to make the large look like a bargain: “Only 30c more for the big one? Why not!” Suddenly, you’re upsizing, and the café is making more profit, all without pushing you. It’s your decision after all.
Zero pricing is a little different, because everyone likes something for nothing – “free” is the irresistible word. Offer something at no added cost, or highlight something free, and people pay attention.
Think of streaming services with free tiers, or cafés offering a free coffee with a scone. The offer might not be their main product, but it gets people in the door. And once you’re in? Maybe you grab a muffin, upgrade and upsize, or just keep coming back.
Both the decoy effect and zero pricing work because they play on how we feel about value, not just what we see on the price tag.
The Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill includes the following proposed changes to the tax law:
Employee share schemes
Some employers, particularly when starting in business, like to compensate their employees with some shares in the company mainly because they can’t afford to pay market wages and this is a way to compete for good employees.
Obviously, if you issue shares in lieu of wages, it is income and taxable but usually neither the employer nor the employee can afford to pay the tax.
As from 1 April 2026 the date for paying the tax is going to be deferred until there is a “liquidity event”. This means something happens which should provide the cash needed. There are three liquidity events:
These schemes are available for private unlisted companies. The employer must notify Inland Revenue and the employee of the election at the time the shares are issued.
Employers are allowed to issue their employees with shares, without incurring tax. The scheme is already in existence but the current Bill before Parliament proposes increasing these thresholds as follows:
Cash basis person
Investors will be aware at a certain threshold they have to account for income from “financial arrangements” on an accrual basis. This means you have to bring into account money earned at balance date but not yet received for interest-bearing investments, as opposed to investment in equities (shares, unit trusts).
There are three of these thresholds.
Most people get caught by either the “absolute value” threshold for the total amount of your financial arrangements (investments plus money owing by you) or the total interest threshold (Interest income plus expenditure on interest) on those financial arrangements. The figure for the total of financial arrangements used to be $1 million but is being increased to $2 million.
The interest threshold has gone up from $100,000 to $200,000.
There is a third threshold. Called the deferral threshold. Here is the calculation:
(Accrual Income – Cash Basis Income) + (Cash Basis Expenditure –Accrual Expenditure). This threshold is to be increased from $40,000 to $70,000.
Gift cards – open loop
Our front page article in the autumn 2025 newsletter told you all about gift cards.
Under the current law the correct way to account for tax on “open loop” gift cards is to treat them as a bonus and tax them as wages. An open loop card is one which can be widely used for purchases such as a Visa card.
Many employers were treating the cost of these cards as fringe benefits. For bigger organisations, where the $22,500 threshold mentioned elsewhere in this newsletter would generally be exceeded, this treatment would not make any difference to the amount of tax collected by Inland Revenue.
This law is to be revised from 16 April 2025. It will become permissible to treat these cards as classified fringe benefits. The exemption available for unclassified fringe benefits will not apply.
People returning to New Zealand and new residents
The government is concerned good brains are being turned away from this country because of the way we tax shareholdings in unlisted foreign companies.
The new rule, known as the Revenue Account Method, is being created for taxing returning New Zealanders, who have been out of the country for at least five years, and those who have never lived here and become New Zealand residents.
There is a list of conditions and the method of tax is complicated to explain. If you or someone you know could qualify, please get in touch with us.
Do you supply electricity to the National Grid?
The law is to be changed so a natural person, who contributes their electricity to the National Grid, and who generates the electricity from a dwelling, will not be taxed on the income.
Unclassified benefits for employees
You will be aware if an employer makes a gift to an employee, the value of the gift is a fringe benefit. It is an “unclassified” gift, there is an exemption of $300 per employee per quarter with a maximum of $22,500 in total for a year.
For example, I give Christmas presents each worth $200 to all my staff. Provided I don’t have too many staff and when I include other gifts during the year, the total value does not exceed $22,500, I get an exemption from fringe benefit tax.
What happens if instead of making the “unclassified” gift myself, the employee actually purchases the gift and then I reimburse them for the cost? Answer: the reimbursement used to be taxable income but the law is now being changed from 1 April 2026 and it is to be treated as a fringe benefit.
When it comes to setting prices, numbers aren’t just numbers – they’re signals.
How you price your products or services can subtly influence how customers feel about what you’re offering. That’s where pricing psychology comes in, using behavioural science to guide smarter pricing strategies.
The big box stores and supermarkets are experts at this strategy.
You can apply four of the most powerful techniques – charm pricing, anchoring, bundling, and urgency –to position your goods or services more effectively.
You will certainly have seen charm pricing. It’s the $19.99 price instead of $20.00. This works because consumers tend to focus on the left-most digit. In this case the ‘1’, not the ‘2’, so $19.99 feels significantly cheaper than $20, even though it’s only a cent less.
This trick can make your pricing feel more attractive without really cutting into your margin.
The idea of anchoring is using a high “reference price” to influence how your actual price is perceived. For example, if you list a premium package for $499 and your standard one for $299, suddenly $299 feels like a great deal.
That high anchor helps frame the value of your other options. If someone takes the premium package, you’ll probably do well, but you’re expecting most to go for what’s seen as the better deal.
Bundling is all about combining products or services into a package. It reduces the need for customers to make multiple decisions and can increase perceived value.
For example, instead of choosing between separate services, customers see a single, value-packed offer, which can help you upsell without the hard sell.
And you will have seen the concept of urgency plenty of times on the internet.
Creating a sense of urgency through limited-time offers or low stock messages taps into the fear of missing out. This encourages quick decision-making and discourages hesitation, especially in online or service-based sales.
Used thoughtfully, these strategies can not just help to convert browsing sales, but also help to position your brand more effectively.
So, try not to set up the meeting in a way that makes it feel like you’re on opposing sides. Sitting directly across from each other can make it feel more like a face-off than a collaboration.
Instead, arrange the seating so you’re next to or at an angle with the other person. That way, it feels more like you’re working together to figure things out.
And if you’re invited into someone’s office and they sit behind a desk facing you, feel free to move your chair to the side of the desk to sit a bit closer – unless your plan is to confront them. In that case, the face-off position might actually work!
If you know someone starting out, here are some practical CV tips to help them get noticed:
Encourage young jobseekers to take their time with their CV. It’s often the first step toward the opportunity they’re aiming for!
